Insights

The Challenge
An unseasonably dry spring, an unprecedented rise in water consumption resulting from lifestyle changes due to the COVID-19 lockdown and the increasingly severe effects of climate change all compound the challenges facing the English water sector. As the regulatory body responsible for the English and Welsh water industry, Ofwat asked utilities in England to put forward proposals for investment to facilitate a green economic recovery while considering a one-in-500-years drought scenario.

The Solution
The company developed a plan using Arcadis Gen’s Decision Making under Uncertainty (DMU) and Adaptive Planning Optimizer (APO) solutions to support their proposal. Large data sets including both historical and publicly available data were used and then processed with leading data science technology. The technology used had never been applied outside of academia before.

Gen worked with the client to deliver the investment plan in two stages.:

Stage 1: The DMU solution handles very large data sets and processes them through a suit of optimization solvers that deliver investment efficiencies across multiple constraints and drivers utilizing unique and innovative technology, moving from a ‘least cost’ planning approach to ‘best value’ planning. Both financial and non-financial metrics were used to define and quantify the desired benefits of the investment. Stage 1 resulted in a set of investment plans based on the least regret options in the context of uncertainty in both climate change future and project inputs.

Stage 2: The APO solution consumes the investment plans generated by the DMU solutions and uses them to model pathways for different futures defining the associated schemes and timings of schemes to deliver the expected benefits, both in terms of water demand and environmental goals defined during Stage 1. The resulting 25-year investment plan generated by the solutions allows the water utility company to pivot from one pathway to another at annual intervals, should the future end up being different than the most likely future as seen from today.

The Result
With the investment plan supported by Arcadis Gen’s unique and innovative technology, the client secured an endorsement from Ofwat that was 71.25% of the total fund available to the entire water industry in England. This enables them to deliver multiple schemes including decarbonizing water resources and building sustainable flood resilient communities.